New year's resolutions, in many cases, are not effective. According to research by Sundried, 43% of people expect to abandon their New Years’ goals by February.
Starting your Money Goals for 2022 in February, after being paid for the first time since Christmas, might be the solution to achieving them.
Experts say it’s better to start some money goals in February. Here are five money goals they recommend:
Make a Budget and Stick to it
Whether you live paycheck to paycheck or have plenty of money to put into your savings, it is essential to set a budget. Doing so allows you to exercise discipline in terms of spending. Says Jessica Chase, Finance Expert.
She adds: "By setting a budget and sticking to it, you’ll be better able to allocate specific amounts of money to different categories, such as necessities, recreational expenses and investments. An example of this is the 50/30/20 Rule."
What is the 50/30/20 Rule?
The 50/30/20 rule divides your budget into three categories making it simple to follow.
50% of your income should be allocated to living expenses, 30% should go towards discretionary spending, and 20% should be saved or put towards paying off debt.
Audit Monthly Bills
‘If you set out to save more money in the new year, you’ve likely taken steps to reduce spending.’ says Andrea Woroch, Money Saving Expert and founder of personal finance site Andrea Woroch.
She adds “Maybe you’re cooking more at home or limiting Amazon purchases, but we often overlook saving on essentials. When was the last time you reviewed your recurring bills to ensure everything you’re paying for is something you need or even use?
Paying for extra services is a waste of money, and plugging these budget leaks can give you more money to spend on things that matter.
This February, set a goal to audit your expenses and trim the fat from your monthly bills. You can accomplish this by negotiating with service providers such as cable, Internet or even pest control or using a service like BillCutterz that haggles for you.
Reassess your subscription services cut what you don’t need or use and consider comparing your mobile plan or auto insurance rates. You can gather quotes quickly using insurance comparison sites like TheZebra.com, which saves users around $922 on average.
The extra money you free up in your budget can give you more flexibility in your lifestyle and help you reach various other money goals you set in January faster.”
Pay off Credit Card Debt
If you’ve had an expensive Christmas, it's likely you may have some credit card debt. As Certified Financial Planner Alex Williams said. The financial goal he recommends is paying off any credit card debt.
He adds “If you can’t afford to pay it off entirely, decide on a significant amount that will make it easier to completely settle it in the upcoming months. Paying off your credit card debt can help you get your finances in order. It gives you the opportunity to shift your focus to a bigger debt such as mortgage payments.”
The birth of investing apps and Premium stock advisor services like Motley Fool Stock Advisor have contributed to making the stock market more accessible in recent years.
Research conducted by Statistica showed that In 2020, 55 per cent of adults in the United States invested in the stock market which has been on a steady increase since 2016.
Certified financial advisor Riley Adams of Young & the Invested agrees ‘Investing has never been more accessible than it is now with fintech apps like Robinhood, Betterment and Acorns leading the charge to break down barriers for all investors.”
He adds “These services provide fractional share investing, meaning you no longer need to save up enough to buy one share of stock. Instead, you can purchase a portion of one whole share as you have money available. This allows for consistent contributions in an automated fashion, providing first-time and experienced investors alike with the ability to build sizable portfolios with small ongoing contributions across long periods of time.”
Download and use a Spare Change Round-up App
“Download and use a spare change app”, says Darren Hazan a proclaimed personal finance guru.
He goes on to say “Round up apps like Cleo round up payments you make, saving lots of minor amounts each day, which does add up to quite a bit over time.
More importantly, their AI software analyses your spending and shows you little ways to cut your cost of living without compromising your lifestyle. Not only can this end up saving you thousands over the course of a year, but it also changes your mentality to saving and spending, in many cases making it fun and gamifying it!”
Related Article: Best Budgeting Apps in the UK
Starting Money Goals in February Could Help You Take Advantage of 2023!
“If you can start in February, you might even have a nice chunk of change to take advantage of in early 2023!” Says Eli Inman, Founder of US Investment Network.
He recommends being aggressive with your goals and thinking about the future to stay on track.
“Essentially, you are taking a small amount of money that you won’t miss each week and pooling it together over a certain length of time.”
“Over a year or more, this can be a very helpful savings account that can do wonders for you and your little family” He says.